Measuring Digital Trade

Audience

During the presentation, various topics were discussed, including digital trade, data collection, and statistics. One audience member questioned the value of gathering information on digitally ordered goods and services. Despite this doubt, it was highlighted that there is a growing interest in having better data on actual services trade, digital trade, and the flow of money involved in paying for a service or a good.

The joint efforts of prominent international organisations were also recognised as contributing to the establishment of the report. A team of four people who handled the complex tasks in a collegial manner worked on the report, which received positive sentiment.

The importance of capacity building to support National Statistical Agencies in monitoring progress towards the Sustainable Development Goals (SDGs) was emphasised. It was noted that a major push is being made to improve the abilities of national statistical agencies to monitor progress towards the SDGs. This alignment with collecting data about the digital economy is crucial.

Investigating two World Customs Organization categories, namely low-value dutiable and low-value non-dutiable, could provide valuable insights into business-to-consumer (B2C) trade. These categories are significant as most B2C operations fall within them.

Concerns were raised regarding the accuracy of transactional data for digitally ordered goods. The tension between CIF (Cost, Insurance, and Freight) and FOB (Free on Board) values makes it difficult to capture the exact trade values. It was observed that the backend transactions are not fully capturing the CIF values.

Queries were raised about the inclusion of digital payments in reported statistics, specifically whether digital payments are counted as ‘trade in service’ or fall into a different category. However, no specific evidence or argument was provided in relation to this query.

Additionally, some attendees sought clarification on the use of definitions for the publication. Mario Postolov, the Regional Advisor in the Trade Division of UNECE, is responsible for publishing and continuously updating a glossary on trade facilitation terms. This glossary is part of the effort to provide clarity in the publication.

Furthermore, the inclusion of postal data in future reports was discussed. Hossam Garbi, responsible for the Trade Program in the Universal Postal Union (UPU), highlighted that the majority of international shipments transit through the postal network. The UPU expressed a positive interest in cooperating for the inclusion of postal data in future reports, demonstrating their global vision on all e-commerce transactions and their efficiency.

In conclusion, the presentation covered various topics related to digital trade, data collection, and statistics. While some doubts and concerns were raised, there was also recognition of the joint efforts of international organisations and the importance of capacity building for National Statistical Agencies. The inclusion of postal data in future reports and the need for better data on digitally ordered goods and services were discussed.

Dan

The analysis explores the significance of digitally ordered trade and the methods used to measure it. Digitally ordered trade refers to the international sale or purchase of goods or services carried out over computer networks. It closely aligns with the definition of e-commerce established by the OECD in the early 2000s. One notable point emphasized in the analysis is that digitally ordered trade encompasses both goods and services and is applicable to all sectors of the economy.

To measure digitally ordered trade, the analysis recommends using business ICT surveys and merchandise trade customs reporting procedures. Business ICT surveys are valuable tools for assessing the uptake of e-commerce in businesses and can provide insights into the value of digitally ordered transactions. Notably, some countries, including China, have modified their merchandise trade customs reporting procedures to identify shipments that are digitally ordered.

In addition to these methods, the analysis highlights the importance of other sources for gaining a comprehensive understanding of digitally ordered trade. This includes household surveys, which can examine areas such as ICT usage and expenditure, providing valuable data on consumer behavior. VAT returns data and card payments data are also mentioned as additional sources that can provide insights into digitally ordered trade. Moreover, multinational enterprise surveys are highlighted as particularly useful for understanding digital trade due to the significant role of multinational enterprises in the trading system.

The analysis discusses the role of digital intermediation platforms (DIPs) in the digital trade ecosystem. DIPs are online interfaces that facilitate direct interaction between buyers and sellers, without the platform taking economic ownership of the goods or services being sold. They offer advantages such as access to a wider global market, particularly beneficial for smaller businesses. The analysis points out that transactions on DIPs have significantly increased during the pandemic. DIPs are seen as key drivers in the digital transformation of trade due to their ability to enable new business models, such as resource sharing, and to facilitate sales through online platforms.

An important insight provided in the analysis is the distinction between real-life transactions and economic transactions involving DIPs. In real life, a buyer pays the DIP, which deducts its fees and pays the remainder to the seller. However, for accurate trade statistics, it is recommended to separate these two transactions: the payment for the actual good or service and the payment for the intermediation service. To achieve this, enterprise surveys, ICT usage surveys, and potentially card payment data can be utilized to collect the necessary information.

The analysis also highlights the potential of DIPs in the digital trade landscape and their role in increasing the share of least developed countries (LDCs) in global trade. It notes that digital ordering and delivery can enable practitioners in remote areas to supply services to businesses and homes worldwide, thus benefiting LDCs. However, the analysis also mentions that the target of doubling the share of LDCs in global trade by 2020, as part of the Sustainable Development Goals (SDGs), was not met. Implementing the handbook’s framework is seen as crucial for achieving a clearer digital trade landscape.

Measurement of digital trade in LDCs is deemed essential to monitor its contribution to achieving the revised SDGs target. The analysis suggests including customs data and estimations for non-dutyable trade to obtain a comprehensive picture when measuring digital trade. It also proposes using postal data to estimate the volume of low-value, digitally ordered goods trade, as there is a correlation between the volume of postal packages crossing borders and digital trade.

In conclusion, the analysis underscores the significance of digitally ordered trade and the need for accurate measurement methods. It suggests that a more comprehensive understanding can be achieved through surveys, customs reporting procedures, and the utilization of various data sources. Additionally, the analysis highlights the role of DIPs in the digital transformation of trade, particularly in facilitating access to a wider market. Furthermore, it emphasizes the importance of separating real-life and economic transactions involving DIPs for more accurate trade statistics. Finally, it addresses the potential of digital trade for LDCs and the importance of measuring its impact to achieve the SDGs target.

Overall, the analysis provides valuable insights into the definition, measurement, and impact of digitally ordered trade, as well as the role of digital intermediation platforms and the need for comprehensive measurement methods in the digital trade landscape. It underscores the potential of digital trade in driving economic growth and its implications for achieving sustainable development goals.

Antonella

Efforts to measure digital trade have been ongoing since the late 1990s. The World Trade Organization (WTO) launched a work programme on e-commerce in 1998 to address the growing prominence of digital trade. Additionally, the Organisation for Economic Co-operation and Development (OECD) developed a definition for e-commerce in the early 2000s. These initiatives reflect the recognition of the need to understand and quantify the impact of digital trade on the global economy.

However, despite these efforts, there is still a lack of official statistics on digital trade. Unlike merchandise trade and services trade, there are no comprehensive and standardised measurements for digital trade. This poses a challenge for policymakers as they require accurate and reliable data to formulate effective policies in all economies and at all levels of development.

One of the key arguments is the need for a clear distinction between the concepts of e-commerce and digital trade. E-commerce refers to the ordering of goods and services, both domestically and internationally. On the other hand, digital trade includes not only the ordering but also the delivery of goods and services, specifically at an international level. It is important to understand this distinction to accurately measure and monitor digital trade.

Monitoring and measurement of digital trade is crucial as it allows for the identification of barriers and problems that may hinder its growth and development. By monitoring its evolution, policymakers can take appropriate actions to address any issues that arise. Additionally, measuring digital trade can help countries access new markets, increase opportunities for businesses, and contribute to overall economic growth.

The broad conceptual framework for digital trade is fairly stable and established. However, there is still ongoing work in interpreting and measuring certain aspects, especially in relation to platforms and other emerging areas. The framework is designed to be future-proof, capable of accommodating changes in the production boundaries and incorporating new macroeconomic standards that will be introduced in the coming years.

Valuation of digitally ordered goods can be challenging due to the use of different pricing methods. Conventional accounting rules are often applied, such as SIF (supplied, installed, and fully paid for) or FOB (free on board) pricing. Translating invoice values into these valuation methods can be complex and require careful consideration.

It is important to note that while financial flows associated with trade, such as payments, are typically present, they are not counted as part of digital trade. The focus is primarily on the ordering and delivery of goods and services themselves. This distinction clarifies the scope of digital trade and provides a more accurate picture of its impact on the economy.

In conclusion, while efforts to measure digital trade have been ongoing, there is still a need for official statistics similar to those available for merchandise trade and services trade. The defined framework for digital trade is firmly in place, but further work is required to collect official statistics, monitor its evolution, and address challenges related to valuation. It is crucial to continue measuring and monitoring digital trade to foster its growth and reap the benefits it offers in terms of access to new markets and economic development.

Barbara

The analysis highlights several key points regarding digitally delivered trade and the challenges of measuring it. Digitally delivered trade is defined as all international trade transactions that are delivered remotely over computer networks. It primarily involves the delivery of services, but there are certain services, such as accommodation and passenger transport services, which require physical presence and cannot be digitally delivered.

One important finding is that digitally deliverable services, which include services delivered remotely through various means such as phone, fax, video calls, emails, apps, and digital intermediation platforms, have a higher value than the services that are actually digitally delivered. In fact, it has been estimated that digital deliverable services were valued at $3.82 trillion in 2022, and they have been growing more rapidly than goods exports and other services that are not digitally delivered. This highlights the significant economic impact and potential of digitally deliverable services.

Efforts are being made to capture and measure the remote delivery of services through surveys and administrative sources. For example, the development of International Trading Services Surveys, as successfully implemented by the USA and Costa Rica, aims to capture exports of digitally delivered services. Additionally, the use of administrative sources, such as VAT data and public expenditure sources, has been advocated to estimate digital service inputs. Argentina has leveraged VAT tax legislation on non-resident providers of digital services, while Ireland has combined multiple publicly available sources to estimate household expenditure on digital services.

However, the measurement of digital trade presents complex challenges, especially for developing economies. Measuring digital trade requires multiple sources and methods, and implementing the recommendations outlined in the handbook can be challenging. To address this, a coordinated statistical building program has been introduced by four institutions to aid developing countries in improving their statistical capacity.

The analysis also emphasizes the importance of tracking digital trade and ordering, as well as the necessity of comprehensive reporting of statistics in this area. Policymakers play a crucial role in the production of statistics for trade, as they can allocate funds for statistical development and ensure that stakeholder consultations are conducted prior to implementing statistical strategies.

Furthermore, the integration of least developed countries into the global trading system is prioritized, and efforts are being made to develop data that allows monitoring opportunities for growth in these countries. A coordinated statistical program has been launched to build up the statistical capacity of least developed countries.

It is noteworthy that digital trade is not solely a business of developed economies, as some developing economies are already fully engaged in digital trade. Particularly, tourism-driven small economies have a significant number of orders made digitally. However, capacity building is required in small economies to accurately measure the scale and value of digital trade, as sometimes they may not be fully aware of the extent of their digital trading activities.

In conclusion, the analysis brings attention to the concept of digitally delivered trade and highlights both the potential and challenges associated with measuring it. The growth and economic impact of digitally deliverable services are significant, and efforts are being made to capture and measure the remote delivery of services. The measurement of digital trade presents complex challenges, particularly for developing economies, but a coordinated statistical-building program aims to address these challenges. The role of policymakers and the development of national strategies are crucial in producing trade statistics and informing policy decisions. It is important to prioritize the integration of least developed countries into the global trading system and provide capacity-building support in small economies to accurately measure and benefit from digital trade.

Moderator

The discussion highlighted several key points regarding digital trade and its measurement. Firstly, it was noted that there is a lack of official statistics on digital trade, which poses challenges for policymakers in making informed decisions. Without reliable and comprehensive statistics, policymakers have to rely on anecdotal information, hindering effective policymaking for all economies and at all levels of development.

The emergence of new business models, such as online platforms, was also discussed. These platforms are becoming important players in economies, but their role, functioning, and contributions are subjects of intense debate. The debate around these new business models highlights the need for a better understanding of their impact on the economy.

The role of the International Monetary Fund (IMF), Organisation for Economic Co-operation and Development (OECD), and United Nations Conference on Trade and Development (UNCTAD) Durito Handbook in improving the measurement and understanding of digital trade was acknowledged. The handbook, which resulted from the cooperation between these institutions, provides clarification on definitions, compilation guidance for statisticians, and country examples. Its endorsement by countries globally after extensive consultation is a testament to its importance in improving digital trade statistics.

Furthermore, it was highlighted that digitalisation is transforming how goods and services are produced, purchased, and delivered. This digital transformation of the economy and services is reshaping the way businesses operate and creating new opportunities.

Measuring digital trade was recognised as a complex task, requiring multiple sources and methods. Statisticians need to measure not only digitally ordered goods and services but also digitally deliverable services. Customs reporting requirements and trading services surveys need to be modified to include questions specific to digital trade. These modifications are crucial to capture the full extent of digital trade.

Implementing the recommendations of the handbook poses challenges, particularly for developing economies. Considering the complexities in measuring digital trade, the implementation of the handbook’s recommendations may be more difficult for these economies. To address this, a coordinated statistical building programme is introduced by the four institutions to assist developing countries in adopting the recommendations and improving their statistical capacities.

The presentation provided extensive information on digital trade statistics and its complexities, shedding light on the importance of collecting data and understanding the landscape of digital trade. It was emphasised that data on digitally deliverable services and digitally ordered trade are significant indicators of the opportunities and challenges in the digital trade arena.

The moderator emphasised the importance of understanding the future of digital trade for economic growth. With digitalisation continuously shaping the global economy, it is crucial to stay abreast of the latest trends and developments.

It was also noted that policymakers play a pivotal role in the production of statistics and have the power to allocate funds for the development of new statistics. Policymakers should consult with relevant stakeholders, including ministries, National Statistics Offices, and central banks, in the development of national strategies for statistics. Considering the specific trade interests and growth opportunities of each country, these strategies should reflect a holistic approach.

Finally, Barbara’s contributions were acknowledged as a major achievement in improving knowledge on digital trade. Her input was commended, underscoring the importance of collaborative efforts in advancing research and understanding in this field.

Overall, the discussion highlighted the need for reliable statistics on digital trade, the emergence of new business models, the role of the Durito Handbook, the digital transformation of the economy, the complexities in measuring digital trade, the challenges in implementing the handbook’s recommendations, and the importance of understanding the future of digital trade. Policymakers are encouraged to consult with relevant stakeholders and allocate funds for the development of new statistics to drive informed decision-making.

Moderator:
So, welcome to this session of the WTO Public Forum on Measuring Digital Trade. This session is co-organized by the IMF, OECD, UNCTAD, and the WTO. My name is Jocelyn Magdalen, and I am a counsellor in the WTO’s Trade and Services and Investment Division, and it is my pleasure to be here today to moderate this session that I believe will be a very interesting one, and for everyone, not only from a purely statistical point of view, but also for policy makers and other stakeholders. Indeed, there have been huge efforts by the international statistical community in the past few years to clarify what digital trade is about, because although many definitions are floating around, statisticians need a working definition to be able to know what they have to measure, and beyond this, it also enables us to better understand what such trade actually entails, and this work will help promoting actions to improve the availability of long-awaited official statistics on digital trade. The reason I’m saying official is because there are many figures floating around out there, but I don’t think we have actually proper official statistics on digital trade like we do for merchandise trade and services trade statistics, for example. The topic of digital trade has been discussed for three decades, and probably even more than this, in various fora, but policy makers still have to rely, as I mentioned, on anecdotal information in the absence of these official statistics. We are increasingly witnessing the digital transformation of the economy, whether as households or businesses. Digitalization is transforming how goods and services are produced, purchased and delivered. Although we believe that digital trade is an important component, we still know too little about its actual size and how it contributes to the development of economies. This is particularly true for the ordering of goods and services, which nowadays is by large conducted online, but even more striking for services where proximity of producers and consumers is no longer the only option. Indeed, services can increasingly be traded at distance thanks to digitalization. New business models have also emerged in recent years. For example, online platforms are becoming important players in all our economies with often intense debates regarding their role, functioning and contributions to individual economies. Having reliable and comprehensive statistics on digital trade, therefore, is key for effective policymaking for all economies and at all levels of development. This is true not only for international trade policymaking, but also for other areas, such as competition policy or taxation policies, amongst others. During this session, we will therefore be discussing the measurement of digital trade, and more particularly in the context of the newly released IMF OECD IMF UNCTAD-Durito Handbook, as you can see on this screen here. Like before introducing the speakers to this session, add that this handbook is the result of the great and continuous cooperation between the four international institutions, but it is also important to note that it benefited from inputs from a large group of contributors, in particular from national experts. In that context we therefore believe that this makes a major contribution to improve the measurement and understanding of digital trade. So now let me introduce our speakers who are sitting here on this podium. So first on my right hand side, Antonella Liberatore who is the head of trade and business statistics and working in the OECD statistics and data directorate. On her right we have Daniel Kerr who works in the e-commerce and digital economy branch of UNCTAD. And finally my dear colleague Barbara D’Andrea who is a senior statistician and acting chief of the international trade statistics section of the Dublizio economic research and statistics division. We were also supposed to have Patrick Quill from the IMF balance of payments division to join us on this podium to present the handbook but unfortunately he could not make it at the last minute due to a change in his heavy agenda. So just before we start the presentation, please note that we will be taking the questions from the audience at the end of the presentation by the three speakers. And with this, again dear colleagues, the floor is yours. Antonella.

Antonella:
Thank you, Jocelyn, for this very nice introduction. You have said maybe half of the most important things that this audience needs to take away. But anyway, I will start this presentation with a little historical background, if we can say so. So efforts to measure digital trade are not precisely new and I would say that the first important milestone happened here in the WTO with the establishment of the WTO work program on e-commerce. This was in 1998 and it was accompanied by a definition of e-commerce. The definition was not a statistical definition but there was a definition. Then we had some other initiatives more on the measurement side and some are listed here, the ones that we think are, you know, most important to mention but the list is not by any means exhaustive. So in terms of measurement, the definition of e-commerce that was developed in the OECD in the early 2000, 2001 and then the current definition from 2009 is, as we will see in a minute, important for the development of digital trade statistics. Then we had, starting in 2015, important work done at UNCTAD on the definition and measurement of ICT services and ICT-enabled services. Then we had some more work related to complementary measures or readiness measures such as those done by the World Bank or the ITU or the World Economic Forum, starting in around 2016 onwards. And then a big push in the measurement agenda was given actually by the G20, starting with the Argentinian presidency in 2018. So then with the ministerial declaration, then there was this G20 toolkit on measuring the digital economy and finally there is this OECD Going Digital project, which is a broader initiative started in 2017 but has, I mean, as I said, it’s broader than just measurement but has a measurement component and it’s still going on and now at the fourth stage. So building on all this, in 2019 we published the first edition of this handbook, so the Handbook on Measuring Digital Trade. It was a collective effort, the first one as well, as Jocelyn said, and it’s important because since that publication we have a statistical definition of digital trade and we have a conceptual framework for measurement. So already then, I mean, it was, as I said, a collective effort. At the time, there was a specific task force chaired by the OECD and the WTO, a group of experts came together, lots of consultations went, I mean, were done at the time. So we can say that the framework has been established already four years ago with this first edition. Now, what we are going to present today is the second edition, another, as Jocelyn said, collective effort. There are even contributors in this room to the work. It doesn’t change the basic conceptual framework, but it enriches a lot the compilation guidance, which is what’s needed to actually produce the statistics. So it includes a lot of clarification, a lot of new experiences, and a lot of inputs from countries, as Jocelyn said. So this is what we are going to present today. We’re going to give you, you know, some ideas about what’s in this handbook, although you have to remember that the main audience for this handbook are compilers, statisticians, so probably not you directly in the room. And I will continue with some more basic concepts, and then I will give the floor to my colleagues Dan and Barbara for some more specifics on digital trade. So let’s see if it doesn’t go. So having covered a little bit the historical background, this slide is about terminology. Because there is a lot of, I mean, there could be some confusion about the terminology, what’s digital trade, what’s e-commerce, how they relate to each other. So this is what this diagram tries to explain. So as I said, the WTO definition is where everything started. So you can see that this encompasses most of the other concepts. The WTO definition covers production, distribution, marketing, sale or delivery of goods and services by electronic means. You know this is not a statistical definition, so the statistical definitions, the two statistical definitions that are important to remember are the first, the e-commerce definition, and the second is the digital trade definition. I am not going to read those definitions aloud. They are going to be explained by my colleagues in a minute, but what we really want you to take away from today is that e-commerce is about ordering and has a domestic component and an international component. Digital trade is about ordering and delivering and has only, I mean, it’s trade, so it only has an international component. So the shape that you see in the middle, that’s basically the common point between e-commerce and digital trade. So digitally ordered trade is equivalent to international e-commerce. And then the last point that this diagram makes is, of course, the overlap between digital order and digital delivery. So some services are both digitally ordered and digitally delivered, and we will, my colleagues are going to go a little bit more in detail on that. So to conclude this introduction, we’re going to talk about the statistical framework a little bit. The upper part of this diagram is the actual, it’s what in scope actually for digital trade. So all the transactions that are in scope for digital trade are included in trade statistics because they are within the production boundary. So the nature of the transaction is what defines, is the defining characteristics of digital trade. So digital trade is all trade which is digitally ordered and or digitally delivered. And you will have these three possibilities there. Then, of course, the product dimension. So digital trade. includes goods and services, although it’s important to mention and to remind everybody that services can be digitally delivered, but goods cannot. And then finally, we have the actors. The actors dimension simply says that everybody, all economic actors can engage in digital trade, including consumers, individual households. So the dotted line, as I said, is what we call a statistician’s production boundary. You don’t have to know this technical term. The most important thing to understand is that digital trade is not something additional or different than trade. It’s part of trade, and it’s part of the macroeconomic statistics. So this framework is totally consistent with the frameworks that we use to measure the economy in general. So when we talk about measuring digital trade, what we actually mean is carving out this dimension, this nature of transaction dimension, so within existing statistics of trade in goods and services. So what’s in the bottom part, so below this dotted line, is the non-monetary digital flows. So those are data flows that do not entail a monetary transaction. So they are not in scope for digital trade. We measure the goods and services that are traded. We do not measure the data that allows this trade in goods and services. With this, I think I will pass on to my colleague, Dan.

Dan:
Thank you very much, and it’s a pleasure to be here to talk to you all today, starting with digitally ordered trade, if I point the thing in the right direction. So you may have read this on the previous slide that Antonella just showed, but it’s worth going through in a bit more detail. So digitally ordered trade is defined as the international sale or purchase of a good or service conducted over computer networks by methods specifically designed for the purposes of receiving or placing orders. And I just want to draw your attention to two key… bits of phrasing within there. The first is computer networks. We’re talking about transactions, orders being placed across computer networks, usually the internet, most often the internet. And the second thing is that those orders should be placed by methods specifically designed for the purpose of receiving or placing orders. So what that means is, for example, if you go onto a website or an app that has an online shop, that online shop is clearly specifically designed to receive orders. But if you message your local bakery through WhatsApp and say, hi, I’d like to buy some bread, that’s, WhatsApp itself is not designed specifically for receiving and placing of orders. Now this wording does not come from us. This sort of framing of digital ordering, it comes from the definition of e-commerce that was developed by the OECD back in the earlier 2000s. So what we have here is two important points, that digital ordering is the same as e-commerce, when you see that term used here, e-commerce ordering. And digitally ordered trade, therefore, is the same as international e-commerce, as Antonella has just shown in the previous slide. Now when it comes to what can be traded by e-commerce, both goods and services can be ordered online. And that includes, indeed, some digitally delivered services that Barbara will talk about in a moment. So if you clocked it in the earlier slide, there is an overlap between the digitally ordered trade and the digitally delivered trade concepts. All economic sectors can engage in digital trade, as we’ve already heard. They can engage in digitally ordered trade as well, and as both buyers and sellers. So we’re all familiar with how businesses sell things to us as householders, but they sell things to governments too, they sell things to non-profits too, and all those sectors use digital ordering. But also you have government-owned bus companies that sell bus tickets online, and you have non-profit hospitals that sell services to governments through online systems specifically designed for the placing of orders, and that counts when it crosses borders. as digitally ordered trade. So when it comes to measuring digitally ordered trade, there are two key starting points that I’m going to look at today. The first is digitally ordered transactions involving businesses, and the second is digitally ordered trade in goods. So to look at the first one, well, when it comes to making things and selling them, businesses are the main players, right? So therefore, we should expect that in most economies, businesses are also going to be the main players when it comes to e-commerce sales. And also, for what it’s worth, the evidence shows that for buying things via e-commerce too. Most purchases made via e-commerce are by businesses buying inputs from other businesses. We won’t go into that in detail today. What that means is that we can, this link between digitally ordered trade and e-commerce means that we can build upon business ICT surveys used to measure e-commerce uptake in businesses to be able to measure the value of digitally ordered transactions. And those sources can be used to cover both sales, which when we’re talking about trade is exports, and purchases or imports. And we could also collect very similar data using core business surveys. We don’t have to use business ICT surveys in economies that don’t have them. But the kind of questions you need to use and what you need to gather is essentially the same. And what this means is that both domestic and international e-commerce can be measured together consistently through a single source. So we can get a single measure and consistent measure, as you can see in the charts on the screen behind me. So what these show is that in the country shown, the majority of e-commerce transactions by value are domestic, the green blocks. But there’s, in both Canada and in Malaysia, a significant portion that is international e-commerce, digitally ordered trade transactions. And as we see in Malaysia, that portion is growing. Now I’d just like to highlight that some countries go beyond this and they collect more detailed information such as the partner country or region, as you can see in the Canadian sort of donut chart up there, or also detail on the products being traded. So things like, is it a good, is it a digitally delivered service, or is this another type of service that allows us to compile the statistics that we need? Now to move on to digitally ordered trade in goods, let’s start by saying that in many countries, far from all countries, but in many countries, most cross-border trade is in goods rather than services. So if we believe that that carries over to digitally ordered trade, that if we can try and measure digitally ordered trade in goods, then we can get a big piece of the puzzle. So several countries, which are given as examples in the handbook, have actually modified their merchandise trade customs reporting procedures to identify shipments that are digitally ordered, take the values off those shipment information, and then add them up to look at the scale of digitally ordered merchandise trade coming in and going out. And you can see the example here of China. I want to express our deep gratitude to China Customs that really were an amazing partner in helping us to put this together, and shows that by making relatively minor modifications to their customs reporting, they’ve been able to measure both digitally ordered imports and exports for goods. And we can see they’re growing very well, at least on the export side. But those are two key sources and two really good starting points that the handbook advocates for, but it’s generally that only gives us transactions involving businesses or transactions involving goods. And while these are two of the largest elements of digitally ordered trade, they’re not the only elements, and we should note that they also overlap. Services can also be digitally ordered. Non-businesses, as I said before, also engage in digitally ordered trade. So the handbook presents various other sources that you can use to get a more complete picture looking in detail at the coverage of the relevant concepts that we want to measure and the different flows, imports and exports. And that includes household surveys. So that could be surveys of ICC usage in household, of expenditure in household, of tourism. We can see up here, we have the example from Italy. They used their household tourism statistics to look at travel packages and accommodation being bought online versus offline. You can look at VAT returns data and try and get some information out of VAT returns. Car payments data, so where we’re using payment cards to buy things online, that can be used as a source of information. And also you can have multinational enterprise surveys that, because M&Es are such a big feature in the trading system, can give us another big part of the puzzle. So on digitally ordered trade, I think, yes, that’s it. Barbara.

Barbara:
Thank you, Dan. Thank you very much. So let us move now to a digitally delivered trade. And I would like to say that substantial work has gone into this chapter. In fact, we were confronted with multiple definitions that, statistical definitions that were developed by different institutions over the years that were all aiming to capture the international supply of services at the distance through digital technology. ICT enabled services. potentially ICT enabled services or potentially digital deliverable services, digitally delivered trade in the first version of this handbook, they were very similar in some respects, yet they were different. So this was confusing, not only for statistical compilers, but also for users. So the first thing in this domain was to converge into a single definition for digitally delivered trade. And we were able to define it as all international trade transaction that are delivered remotely over computer networks. Let’s say that the handbook takes the convention that only services can be digitally delivered, and this is fully consistent to an existing trade statistics that you can find on our websites or from national sources. So only services can be digitally delivered. Delivery can take many forms. It can also include phone or fax or video calls, emails, and of course, as apps and digital intermediation platforms, as we have seen already for digitally ordered trade. So digitally delivered trade in the handbook is basically equivalent to mode one cross-border supply, as identified in the WTO agreement, a general agreement on trade and services, mode one, but for digitally deliverable services. Now, while I think this, Antonella has already touched upon a little bit the new part and also Dan, there is a conceptual overlap, meaning that many, and in fact, most digitally delivered services very often are also digitally ordered. although not necessarily. I can sign up in presence to a language course then will be taking place online and be provided by a foreign language school, for example. So I mentioned digital deliverable services. So what are digital deliverable services? So the first step is to identify digital deliverable services in the balance of payment of a country because the balance of payment is the main source of all the data that you find on services trade. So that is the first step. But then the second step is to carve out services that were actually digitally delivered. So, I don’t think so, okay. Oh, sorry, yeah, this is the one. So what are digitally deliverable services? Let’s say that while all services and of course goods can be digitally ordered, potentially all digitally ordered, not all services can be digitally delivered. This is due to their own nature. Some services must be provided in presence. Think about accommodation services or passenger transport services. So as we said is the first step is to identify this digitally deliverable services. Some services, however, are born digital. Think about cloud computing services, you can think of LAN software downloads, online gaming, streaming on media, digital communication services. and so on. I’m sure you can add on many more examples. But in other cases, there are services which were previously provided mainly in person, but are now commonly accessed and provided through online interfaces at international level. So like insurance and pension services or many financial services. There are also other categories of services where over the years, we’ve seen a replacement of in-person interaction to online interactions. And this is taking place particularly during the pandemic, which saw a boost in services trade digitalization. And I’m sure also here you can find many examples, but this, it comprises an ecosystem of business, professional services ranging from legal services to architectural to management consultant services and also others like health services. Think about telehealth. I just gave an example about e-learning. So that’s another one. So there, of course, and for these kind of services, while we see an increase in digitally delivered, they might still be provided in person. So there is a mix. Hence the difficulties to carve out from the amount, from the official statistics, the portion of services that were actually digitally delivered from those that were provided internationally through in-person interactions. So that’s the difficulties. Let me say that the handbook, and you will see which is accessible online, contains both an aggregated list of digitally deliverable services and a country’s balance of payments. So you will find. in your country’s statistics, for example, on our website. So that’s a list. And also, sorry, and first the condensed, and then another one which is very disaggregated in one of the Annex and Annex C. So you see all the entire breakdown. What we can say is that digital deliverable services are naturally larger, you know, the total value of digital deliverable services is higher than the value of services that were traded, at least higher or equal to the value of services that are actually digitally delivered. And I think this can be seen in the chart on the left, which is the black line over there. So these are, you know, is the amount of the global export of digitally deliverable services as estimated. You know, by the WTO earlier this year in April. And then you will see that the red line, dotted line is smaller, so I mean the amounts are smaller. And this represents the estimated value of digitally deliverable services. How we’ve done this? Through a recommended approach in the handbook, that is through applying expert judgment shares, taking into account the experience and the results of the country’s surveys. And yes, and otherwise following an approach that is recommended in the manual statistics international trading services. So if you want to know more, of course you can get back, but we don’t want to give you all these details. So, just the last thing. So we probably you’ve heard, I mean, coming here to the WTO, there’s a lot of talk about this digitally delivered services. So we have estimated them as a value of $3.82 trillion in 2022. and have been growing. You can see in the chart much more rapidly than goods exports and other services which are not digitally delivered. So regarding the composition, and again this is according to our estimates, the bulk of digitally delivered services is represented by business services, mainly provided to business to business. This is a lot, there’s also intrafirm trade, and they represent some 40% of the total, and they’re followed by computer services, which are rising over the years very rapidly, and then financial services, and then you see all the other categories, they are a little bit smaller. So now we move on, so this is the first approach, sorry, okay, so this is the one. But of course, these are expert judgment shares, this is the first step. What is recommended is that countries develop international trading services surveys, and then they use, for those who are already using them, for compilation of their trading services statistics, and add some questions to capture this remote delivery of services, some specific questions that can help out. And these are just a couple of examples. For the US, they started already many years ago, and let’s say that they’ve gradually improved the surveys, because you learn from experience, we all learn from experience. And so they’ve managed to gradually improve the surveys when there were some shortcomings, and this applies also, of course, to other countries. Just for your information, the U.S. is actually currently preparing another benchmark survey and they are targeting specifically digitally delivered services. They’re expanding and they’re using the definition in the handbook. So that’s and they’ve expanded also the number of sectors which will be covered from 13 to 18. But this is just an example. So they were digitally deliverable. So this was already since many years ago, the first attempt. I think a very successful example is that one of Costa Rica, which has now arrived to the sixth edition. And this is because Costa Rica was one of the first countries to take advantage of UNCTAD’s pilot surveys on ICT-enabled services. So they’ve been capturing their exports of digitally delivered services because basically the definition is the same. And you can see in the chart on the right that these services, they represented, especially during the pandemic, more than 50% of their total services exports and 20% of their total goods and services exports. But more importantly, they accounted for 7.2% of their GDP. So this is the important contribution that this sector can make to a country’s economy. And this is for 2021. And in the handbook, of course, you find many other examples of other countries. So if you’re interested, and also the service they have used. But why? Sorry for Argentina. I don’t know why, but I don’t know what has happened there. So while some countries have focused on the business side and on the export side, others have explored other data sources to capture the inputs. And this is the case using administrative sources like VAT and this is the case of Argentina. They capitalized basically on some legislation that imposed VAT tax also on non-resident providers of digital services. And then of course this information doesn’t come out ready, but combining with information collected from those who are in charge of revenue collection, they were able to come up basically with an estimate. If you want to know more, I will tell you more. I think what is important is that they have been able to measure what was the input. So what is paid by household. And this is important because the expenditure by household is probably a weak part on our trade statistics and you see the composition and most of the expenditure in their own experience which is very recent because this is data for the third quarter of 2022. For trade statistics it’s very recent especially and it’s basic audiovisual. Or a similar example is by the expenditure by household also in Ireland which also combined with other publicly available sources and so on. And again like in the case of Argentina, most of the expenditure by household is on music and streaming, video streaming and all of that. That’s where the inputs are. Online gaming, they had also online gambling and so on. So these amounts are in a million euros and their main partner in that case were other European countries. And I’ll stop here. So I’ve spoken already too much.

Dan:
Thank you. So Jocelyn mentioned earlier that unfortunately our friend Patrick couldn’t be here. Now Patrick has a lovely, relaxing Irish accent. I’ll save you my impression. You’ll just have to put up with my dull accent instead. So as we heard earlier, there was a mention of digital intermediation platforms, which are an important part of the ecosystem when it comes to both online ordering, sorry, digital ordering and digital delivery in the trade area. So what do we mean when we talk about these? They’re defined as online interfaces that facilitate, for a fee, the direct interaction between multiple buyers and multiple sellers without the platform taking economic ownership of the goods or rendering the services that are being sold. So there’s a couple of things I’ll draw your attention to there. The first is we’re talking here about online platforms where we have multiple buyers and multiple sellers, not a single seller selling their wares to everyone. Secondly, the platform itself is not ultimately responsible for rendering the actual good or the service being intermediated. Give you an example. Two weeks ago, I ordered a beautiful vacuum cleaner off eBay. The seller was responsible for sending that to me. They did send me a vacuum cleaner, but it was the wrong one. Ultimately, they were the one responsible for not giving me the correct underlying good that I bought. But eBay, as part of their intermediation service, liaised and made it all right. And why do eBay do that? Why did the platform do that? Well, they do it to make money and they make money by charging fees to the buyer, the seller or both. So I think all of us in this room could probably name at least 10 different online platforms, online DIPs. They’re really key drivers in the digital transformation and we see that their impact or their role is growing. So, the role for DIPs is to, on the one hand, to facilitate access to the global marketplace, and this is especially important for smaller businesses as a way for them to begin accessing customers on the other side of the world. They can also give buyers not only access to a much wider product variety, but also a great ability to easily compare prices and sort of minimize their spending accordingly. And they actually are also enabling what we might call new activities or business models, such as where you’ve got households transacting directly with each other instead of almost acting like businesses, or like resource sharing of vehicles or things like that between households. And on the right, we can see from the chart that sales through these online platforms, these DIPs, has really been booming. It shot up greatly during the pandemic from 2019 to 2021, and almost, I think it’s $4 trillion of transactions going through these selected platforms now. So DIPs’ role is to intermediate transactions, but there’s kind of a difference between what happens sort of in real life versus what happens in economic reality. So often what happens, this isn’t always the case, but often what happens is that a buyer purchases from a seller, sort of this is always what happens, a buyer purchases from a seller via a DIP. Often what happens is that the buyer pays the DIP the money for the transaction. The DIP subtracts the fees that they charge, and then it pays the remainder to the seller. But that flow doesn’t really reflect the economic reality. What’s really happening in economic reality, which we want to capture in our trade statistics, is that there’s a payment from the buyer to the seller for the good or service that’s actually being transacted. And then there’s a payment or payments from the seller and or the buyer to the DIP for the intermediation service that they’ve provided. So it might be one transaction in terms of a swipe on your bank card, but there’s actually two things that you’re buying when you do that. And of course, the buyer, the seller, and the DIP can be resident in different economies. And when that happens, we end up not just with multiple transactions, we end up with trade transactions. Now in terms of measurement experience, there’s actually very limited country measurement experience in disaggregating things this way to measure them according to the framework. But what the handbook, the handbook does share what experience we’ve been able to gather. And it recommends collecting information from DIPs that are resident in your economy using enterprise surveys. It also recommends collecting information on transactions made by DIPs using ICT usage surveys or other surveys, perhaps of households and businesses. And it also looks at possibly using other sources such as card payment data to focus on major dips. So often in card payment data, you get an item that tells you who the payment was to. We’ve all heard of Netflix. You can maybe pull them out and aggregate some statistics from that. So with that, I finish on DIPs and if I can just change the slide. There we go.

Barbara:
Yeah. Thank you very much, Dan, because obviously I have a little problem. Maybe because I’m too far away, too far away. So yeah. Let’s just take some key technical ways. I think that the second edition of the handbook really represents a major step forward over the improvement of digital trade statistics and towards the measurement of digital trade. As you will see, it is very rich in terms of – first of all, I said already, it clarifies definitions, but it’s also very rich in terms of explanations. compilation guidance for the many statisticians around that are first-timers into this domain. And lots of country examples, you know, about experiences so far, and other digitally ordered, digitally delivered, the platforms, digital intermediation platform, and so on. An important key, an important point here to stress is this, it has been, the handbook has been endorsed by countries through extensive consultation, through global consultations in different statistical forums, and we all wish to thank them all for their contribution to the development of, and the production, you know, of this handbook throughout the many months of work, of joint work. Another key takeaway is that clearly this presentation has shown you that measuring digital trade is complex. There are multiple sources that are needed, there are multiple methods to be able to capture all its dimension and to build it in a coherent manner. We need, you know, the priority is to measure digitally ordered transactions by business. We need to measure digitally ordered trading goods through adjustments in the customs reporting requirements. In order to measure digitally delivered trade, we have to ensure to have a full product availability for digitally deliverable services. And we need to include questions on digitally delivered in international trading services surveys, as we said is the recommended source. So it is clear that due to these complexities, the handbook, I mean, Implementing all these recommendations is very challenging, especially for developing economies, and that’s why Hamburg introduces a coordinated statistical building program by the four institutions to the benefit of developing countries to ensure that they are not left behind in their ability to measure, to monitor, and to respond to the challenges of digital trade.

Moderator:
Thank you very much, Antonella, Dan, and Barbara, for this very rich and interesting information. I think a lot of information has been provided in the presentation, a lot about statistics, explaining also the complexities of understanding what digital trade is about, so hoping that this is also useful beyond the pure statistical world. I think it’s also interesting to see how this has developed in this context and how this can then also be used and useful beyond just the pure statistics work. Given that we still have time left in front of us, which is great, so thank you for the great timing, I would like to open the floor for your questions or comments on all this work, and please, before raising your question, may I ask you to provide, give us your name and your affiliation. So the floor is open.

Audience:
I see a question. I’m Matt Nicely with Akin Gump. I have a question that I feel almost like an idiot to ask it, but I’ll ask it anyway. Um, when you think about the digitally ordered versus digitally delivered, I can imagine obviously we’re all very interested in having better data on actual services trade, digital trade, the flow of money, paying for a service or a good. What’s the interest, what’s the value from your perspective on gathering information on what is digitally ordered?

Moderator:
Thank you. Are there any other, maybe we could take two or three questions first. Any other questions? I see one in the back on the left-hand side first. Please.

Audience:
Yeah, I’m Tomaso Giardini from the Digital Policy Alert. I wanted to ask what you would consider the main limitations of this methodology and looking forward what you’re hoping to improve for the next version.

Moderator:
That’s a very good question. Thank you. Please.

Audience:
Mario Canales from the World Economic Forum for Mr. Daniel Kerr, if you had to choose three already available statistics or data points that offer a glimpse of the current state of digital trade in the world, what would they be?

Moderator:
Thank you. So who wants to start?

Antonella:
Barbara, which one do you want to take? Thank you for the question. I hope that I understand the question correctly. So you’re asking, what is the value, I mean, what’s the why, basically? We are measuring digitally ordered trade in general, right, goods and services, right? Okay. It’s a good one, actually. I mean, it’s important to remember why we do things. Otherwise, you know, we feel that, you know, we’re doing work for nothing. So it’s a good one. I mean, so the way things are traded, so the way products are traded matters, okay? So these digital technologies, they allow, in particular, so we are talking about digital ordering. So the ability to place orders or receive orders in a digital manner. So increase, I mean, gives you access to new markets, right? It gives you the, if you’re a business, it gives you the possibility to reach global markets in a second, let’s say. If you’re a consumer, it gives you options to buy from different places. So we are interested, of course, in this way of trading. And we are interested because there may be barriers to this digital ordering. So this is where we want to, you know, monitor, you know, this evolution because if there are barriers and if there is something that hinders, then, you know, we may have a problem. So that would be my short answer. Thank you.

Barbara:
Yeah, maybe I can add. I mean, I think that we all know that there are negotiations ongoing here in the WTO. So there are, so this tells you already why it is important. So we are having to track without going into too much detail. It is important to provide policy makers and trade negotiators. with the data to make an informed decision about the policy. And I think this is the most important. We don’t want to produce statistics for the sake of producing numbers. I think, Antonella, you mentioned that there is a reason why we are doing this, and this is a very important reason. I want also to add on the statistical capacity building on activities in this field, because we don’t want the developing economies being left out from the growth opportunities of digital trade. So that’s why we’re doing so. But then I wanted to respond, I think, to the second one, from the Digital Policy Alert, about improvements. So what else can be done? Okay, I was a little bit discouraged when you prepared for the next one, because we’re actually quite relieved of having produced this one that was published, because it was quite a bit of work by the four institutions. So I’m not looking forward to that right away, I tell you. But we have identified some areas that probably would need a little bit of understanding, like in the digitally ordered part. We know that, for example, you can sometimes use WhatsApp, for example, to order something. So this is, according to the handbook, is not strictly speaking a method to be specifically designed to placing and receiving orders. So would that be covered? Not really right now. But of course, if we think that there are some automatic, artificial intelligence which the technology would change, then yes, there will also be. But there are many other areas of future developments and because there are ongoing revisions in the macroeconomic statistical framework, both in the national account statistics and balance of payment statistics and the handbook, you can read it, so it’s ongoing at the moment. It’s new, it will be released in 2025, so they’re working on this. And of course the next edition of the handbook will have to take into account any changes in this macroeconomic statistical framework to ensure the coherence, because we need to ensure coherence of statistics on digital trade with statistics on trade that is not digital. So that’s why I would say that. Thanks.

Antonella:
Before, sorry, before going to Dan, I wanted to add something on this question about the future work and Barbara, I mean, I totally agree with everything Barbara said, but I wanted also to give a more positive note in the sense that we have tried to build this in a way that’s a little bit kind of future proof. So as Barbara said, so the new macroeconomic standards, so they are coming, so in the next couple of years, you remember at the beginning I thought about this production boundary. So the production boundary is going to change a little bit. So the framework that we have allows for that implicitly. So it’s already basically covered, but of course there are some more areas of, I mean, of research, but it’s more, I would say a little bit more on the empirical side on how to interpret some definitions, how to measure some things that, for which we don’t have a lot of experience, like Dan said, the platform. So let’s say that the broad conceptual framework, to be honest, I believe it’s pretty stable and established, but the work is not completely over.

Dan:
Yes, I was going to make a similar point to Antonella, which is that really when it comes to this handbook, what I’m greatly looking forward to is hopefully seeing that the core concepts stand the test of time. But what will happen is that countries and other partnerships will work to implement the framework and to work out bits that aren’t completely clear and need further development. And that will take us to new experiences that can be shared across countries to help broaden the implementation of the framework. And one way that we plan to do that, and I’m greatly looking forward to, is through our statistical capacity building coordinators across the four organisations to help countries in doing that. And ultimately, my dream, hopefully by the time I retire, is that we might one day have a database, enough countries have done this, to have a database with statistics in it and really get a much better grip of what the world looks like when it comes to digital trade. Which leads me on to the question that was posed to me. So I was asked, I feel like I’m doing a test or something, but three statistics or data points that give a glimpse of, or an understanding of what the digital trade landscape looks like now. So the first thing I would like to highlight is the, actually at UNCTAD this week we’ve just published the updated statistics on trade in digitally deliverable services. They show us that in 2022, the digitally deliverable services comprised 55% of total services exports globally. That’s declined a bit from the peak in the pandemic, which was 63%. But when you look into the data, what’s happened is that actually the amount of digitally deliverable services trade has kept growing. It’s just that trade in other services has come back from the pandemic disruption. Now that’s one of our two subsidiary concepts, digitally delivered services being. proxied through digitally deliverable services trade. When it comes to digitally ordered trade, we have much less information, unfortunately. That is an area where there’s more to do. But in a recent report that we published at UNCTAD on measuring the value of e-commerce, we looked at what countries had on the amount of money businesses were making through e-commerce sales. And as part of that, we looked at the information they had on international e-commerce. And for the few countries that we found through that, we found that digitally ordered exports were worth, for those small number of countries, between 5% and 18% of total goods and services exports. Now, Barbara and I have spent a lot of time discussing this, and it’s very back of the envelope to put those things together. We’ve discussed the conceptual overlap that you really need to gather primary information on. But when we try to put them together in the best way that we can, we come up with an estimate that digital trade for those countries, digital trade exports for those countries, account for somewhere between 10% to 45% of goods and services exports. So if we extrapolate from that to the global level, the global average is probably in there somewhere, but it’s a big range. And this is why we need to implement this framework, to get a proper view on the role of digital trade as a portion of total trade.

Moderator:
Okay, thank you. I think Torbjörn wanted to ask a question, and two questions at the back.

Audience:
Torbjörn. Thank you so much. So my name is Torbjörn Fredriksson. I’m leading the team in Ankta that has been contributing to this fabulous report, I must say. And I dare to say that, because when we talk about these kind of joint efforts of big international organizations like we’re seeing on the podium here, and IMF who is not there right now. It’s a tremendous effort. And sometimes we just think that this is the abstract IOs that are coming together in the grand scheme. Actually, this work has been very much done by four people. And these are the three there, plus Patrick. And I think you deserve credit because you have worked day and night to come to groups with very difficult and challenging work. And you have done so in an extremely collegial manner, which is really exemplary, I would say, to how we should work together among the international organizations. I just wanted to commend the work that you guys have done. And I would suggest a big applause for you guys. You’re too kind. Thank you for taking over my role as a moderator. Okay. The gentleman at the back first. Yeah, thank you. Simon Lacey from the World Economic Forum. It’s very nice to hear. It’s not often you get praise from your boss. So you guys really just enjoy the moment. I just wanted to say, I think Barbara’s response to the question from the Digital Policy Alert reminded me of something that Daniel Craig once said. Remember, Daniel Craig was this James Bond actor. And after he made Spectre in 2015, which was like his fourth James Bond film, somebody asked him, would you like to make another James Bond movie? And he said, I’d rather slip my wrists. But then he sort of went on to make the last one in 2021. It wasn’t Die Another Day. What was it? I forget. Anyway, but just a serious question. So I was talking to some statisticians at UNESCO at the end of last year about some of the linkages between trade and the SDGs. And they told me that there was a big effort right now going on to build capacity in national statistical agencies to help them. to help them better monitor progress towards achieving the SDGs. And so my question is given that there are also linkages between digital technologies and achieving the SDGs, is there some sort of alignment of these capacity building efforts to better empower national statistical agencies to capture statistics on the digital economy and measure how close we are to achieving the SDGs, things like access to clean water and the many other indicators that we have? Thank you. Thank you very much. My name is Preetam Banerjee. I’m from the Center for WTO Studies. First of all, congratulations on an excellent piece of work. Thank you. On the digitally ordered goods, one of the things that we used to look at earlier was two WCO or World Customs Organization categories. These are the low value dutiable and the low value non-dutiable because most of the B2C moves around these two categories as well. So my quick question was that would that also be an interesting source to look at for this category of trade? Secondly, given the source of data you’re looking at, the transactional data, essentially digitally ordered goods are the same and they’re moving in the same trade channel, the only the transaction type is different. So this tension between CIF and FOB values will always remain. So you will not even capture the CIF if you’re looking at the backend transaction. So the discordance between the actual trade data and what you would capture, is that a fact that you have considered or looked at? Thank you.

Moderator:
A third question.

Audience:
My name is Jing Huang. I’m an academic from University of Sydney Law School. So my question is has this statistic also include the digital payment? The issue I ask is whether the digital payment, like you use digital currency, is it a trade in service or something else? Thank you.

Moderator:
Thank you for the three questions. So who would like to start? Oh, okay. Sorry, I didn’t notice. So another question, who first? Please.

Audience:
Thank you very much. I’m Mario Postolov, the Regional Advisor in the Trade Division of UNECE. And we have published and we continue updating a glossary on trade facilitation terms and for us this includes electronic business. Your definitions that you made in the beginning, very simple question, do you see them as authoritarian so that everybody uses them or as working definitions for your publication? Thank you. I’m Hossam Garbi, so responsible of Trade Program in Universal Postal Union. So first I would like to congratulate all the teams for the fabulous report. And as you know, the majority of international shipment are transiting through the postal network. In your report, are the postal data included in the second edition? And if not, so UPU is always ready to join your effort and to cooperate with you maybe for the next report because you know… With the postal data, we have global vision on all the e-commerce transaction and the efficiency of the e-commerce transaction itself through the customs side and also the payment side and would like to have this fusion of data between all the team. Thank you.

Moderator:
Okay. So, who would like to go first? Yes.

Barbara:
Well, first of all, I want to thank you all for your interest because these are very, very good questions, sometimes difficult questions. So, the one on SDGs, yes. Okay. I think that from our organizations, you know, certainly from UNTA, WTO, the integration of least developed countries into the global trading system is one of our priorities and this is also in one of the SDGs, so I think it’s 17-something, 17-1-1. So, we also would like to help them to develop the data, to be able to monitor, to see opportunities for growth. So, that’s for us as one of them, you know, and then there are many others, SDGs, you know, correlated SDG, but from a trade perspective, I think that this is the first one and more in general also for developing economies. So, that’s why we started this. this coordinated statistical program, which in fact it will take place, Dan, I think you mentioned it, in the next few months, you know, we already have a number of activities because our countries are requesting this type of information to build up their capacity in producing this number. Yes, I’ll leave it to the others because there are many questions we can share.

Dan:
Okay, thank you, yes, I just want to add to what Barbara said, though, because it’s not just that there’s a goal, but there is a target in the SDGs that was by 2020 to double the share of LDCs, the least developed countries in global trade. Now that didn’t happen, in fact actually their share has declined, but what can we do about that? Well, digital trade, digital ordering, digital delivery hold huge potential promise for all countries to be able to access new markets, new customers, for skilled practitioners in remote parts of the world to be able to supply services directly into businesses and homes on the other side of the world. So there’s a lot of potential there, but it certainly doesn’t seem to be being realized yet, and unless we make sure that we are measuring digital trade in LDCs just like we are hoping to in other countries, we will never see and be able to monitor whether it’s contributing to us not achieving that target because it’s too late, but achieving the revised target that will undoubtedly come. There was a question on digitally ordered goods about this question of you have your goods trade measured through customs, customs data, like what actually goes through the customs formal systems, and then you have items that are low value so they sort of don’t require the same level of customs reporting or maybe even no customs reporting. So it’s true, if we just take what goes through customs, the data disaggregated by the WCOHS codes like you mentioned, and add them up, that will only give us a partial picture. We can go into that here, but the handbook does include a whole section that talks about the interplay of those two parts and the need to also do estimations for the bit that is non-dutyable, I think you called it. And that brings me on to the link to the postal data. So it’s true, there’s a great correlation between the volume of postal packages transiting borders and digital trade, but on its own the volume doesn’t give us the measure we’re looking for, we’re looking for the value. So it’s not in there as a unique data source, but it is referenced quite heavily in reference to that measurement of the merchandise trade across borders that is below the thresholds, and there’s a source that can be used to try and estimate the volume of that to give us a more complete picture of digitally ordered goods trade.

Antonella:
Okay, so I think I have some leftovers. One was a very good one about the valuation, okay, so related to goods. Of course goods, digitally ordered goods, and how do we value them, is it CIFOB, do we have issues with that? So as a principle, all of the accounting rules, so all of the rules that are used, that are established and should be used to measure merchandise trade, they are digital. applicable, or they must be applied to measuring digital trade. So this includes this convention that we have of measuring, of valuing a product’s goods at a SIF or a FOB price. So this convention is actually a model that we have built, you know, to have this uniform form, point of evaluation, which creates, I mean, it’s kind of, I think it was born to simplify, but it’s actually, I mean, it creates a lot of issues. And it’s not always very easy, you know, to kind of compute these values, when in practice, you know, these goods do not travel from the border to one economy, to the border of the other economy by, you know, following the model to the letter. So my answer to the question is, in theory, yes, everything should be valued at SIF or FOB. When you go into low value trade, you may have issues, you know, postal trade, is it, you have invoices, let’s say, it’s how do you transform invoice values into SIF and FOB valuation. Some compilers have looked a little bit into that. We have examples from China on the handbook. So let’s say that the answer is, in theory, yes, in practice, it’s complicated, but yes, compilers are trying to do this. Then we had a question on digital payments. So payments, so they are the, let’s say, the financial flows are these counterparts of the flows, the trade flows. So trading goods and services is normally accompanied by a financial flow, so a payment. The payment is not in scope for trade, is not in scope for digital trade. So having said that, if there are some fees involved, you know, if there is some service that’s provided in conjunction with this payment and this service is internationally traded, yes, that’s captured. So it can be a fee on a credit card payment, for instance. So that would be covered in financial services, that would be digitally delivered, but we do not cover payments per se. And then there was the last question about our definitions. The definitions are there to stay. It’s not something that we have made up. So I mentioned in the beginning, it’s been a process, it’s been years, it’s been consulted across the world, basically. So now this is the framework that we have for digital trade. As Barbara said, our macroeconomic framework, so the national accounts, the balance of payments, they are all undergoing revisions. The next manuals, they will acknowledge that digital trade is defined like this.

Barbara:
Thank you. I just want to, just to say something else, just a comment. Very often digital trade is considered to be a business or is seen as a business of developed economies. This is not the case. I mean, some developing economies, they’re already fully engaged into digital trade, like digital older services, we discussed this then, and they don’t even know. Think about small, small economies, you know, they’re small. Maybe they’re tourism driven, and maybe they’re export, they have a large number of tourism orders being made digitally through the websites of hotels, you know, some platforms. They might offer, I don’t know, scuba diving services, tour guides that are pre-booked before the tourist arrives, and this can represent an important value. And they’re already into that. But they don’t know. And so we want also that to be known. And that’s why we need to build capacity so that they will be able to share, to capture that amount. I mean, how much they’re actually already trading online and digitally, but they’re not aware. And this can be very big for countries, for small economies, when not a very diversified economy. And actually can be the inverse for some other big economies, which have much more diversified economic structure. So that’s just a reflection. Thanks.

Moderator:
Thank you to the three of you. I just would like, before closing the session, I just would like to use my privilege of being a moderator to also ask one question, if I may, which is basically a forward-looking one. Because now that we have this sound framework to measure the digital trade, what next? I mean, I know you’ve been providing some ideas, but I would like to know probably what should be the priorities, and what could be the role of policymakers in the development of these statistics? So I don’t know who would like to take this question.

Barbara:
I hope you offer me a drink afterwards, Jocelyn, after this. OK. So what is the role of policymakers in all of this? So let me say that policymakers are in the driver’s seat whenever it comes to the production of statistics, I would say, in any domain. And this is including trade, whether digital or not. So, but then they have to, of course, because they can allocate, they have the power to allocate funds for the development of new statistics. But of course, before they do that, there should be a prior consultation, in fact they should consult with all the relevant stakeholders, the ministries, Ministry of Trade, of course in this case, National Statistics Office, central banks, authorities, and so on, to the development, for development of national strategies for the development of statistics. And this strategy, in my opinion, should take into account, should reflect what are the trade interests, of course, which is specific to the country, and the growth opportunities. So in this case, what is the target? Do you see growth opportunities in digital order trade, or let’s say international e-commerce, as you say, of goods? Is it more into the digital delivery of services across borders? Can be both, but then first, once this is set as a strategic goal, then we go down to the production of statistics, and so that this is the role of statisticians to come up with the data which is crucial to inform policy makers. Hope you’re happy.

Moderator:
Very happy. I’m always happy when you say something, Barbara. So thank you very much. I think this brings us to an end to this session. I would like again to say thank you for this big achievement with this. I think this is really, truly a… a major achievement for improving knowledge on what is the digital trade. Thanking my colleagues here on the podium, but also another important contributor to the report, Ying Yang, who’s here sitting in the room with us. And I would also like to thank all participants for making this session very lively. With this, enjoy your evening. Thank you. Thank you. Thank you.